Enterprise

Development
Compliance
Verification
Report

Shanduka Black Umbrellas

(Non-profit organisation)

Compiled by:

Issued:

16 November 2015

Stacy Coetzee

Valid:

15 November 2016

Copyright 2010 by Empowerdex (Pty) Ltd.1st Floor, Building 3, Inanda Greens Business Park, 54 Wierda Road West, Wierda Valley, Sandton,2196.
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TABLE OF CONTENTS

TITLE

PAGE

SECTION
SECTION 1 INTRODUCTION AND METHODOLOGY

SECTION 2 ANALYSIS & FINDINGS

SECTION 3 CONCLUSION

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SECTION 1: INTRODUCTION AND METHODOLOGY

INTRODUCTION
Empowerdex (Pty) Ltd (Empowerdex) is pleased to present this verification
of the Enterprise Development Compliance status of Shanduka Black
Umbrellas (a Not for Profit organization), hereafter referred to as
Shanduka Black Umbrellas.

Arguably, one of the most significant pieces of legislation affecting

business today, the Broad-Based Black Economic Empowerment (B-BBEE)
Act and its accompanying Codes of Good Practice (the Codes) clarify the
governments transformation objectives, tying them in with ambitions of
higher economic growth. The Codes demonstrate how B-BBEE is tied to
the economy, proving that B-BBEE is not just vital for the countrys
prosperity but a catalyst for growth.
The Codes provide a standardised means of measurement with the aim of
ensuring consistency and harmony in the implementation of B-BBEE while
establishing the foundation for a more integrated, more transparent
transformation process. Whilst remaining only regulatory guidelines, the
Codes

are

aligned

with

key

pieces

of

legislation

including

the

Employment Equity Act, the Preferential Procurement Act and the Skills
Development Act.

METHODOLOGY

Code Series 400 of the revised Codes of Good Practice (the Amended
Codes) seeks to measure a companys compliance with the Enterprise
and Supplier Development component.

Empowerdex has utilised this Code to measure the degree of compliance

of Shanduka Black Umbrellas. Some of the terminology is outlined below.

Enterprise Development Contributions

Enterprise Development contributions consist of monetary or nonmonetary, recoverable or non-recoverable contributions actually initiated
and implemented in favour of beneficiary entities by a Measured Entity
with the specific objective of assisting or accelerating the development,
sustainability and ultimate financial and operational independence of that
beneficiary. This is commonly accomplished through the expansion of
those beneficiaries' financial and/or operational capacity.

Monetary or non-monetary contributions are carried out for the following

beneficiaries:

100% Black Owned Qualifying Small Enterprise and Exempted Micro

Enterprises
Enterprises.
rises. These beneficiaries qualify for Enterprise Development
under both the Codes and the Amended Codes.

Enterprise Development contributions include:

Grant contributions to beneficiary entities

Investments in beneficiary entities

Loans made to beneficiary entities

Guarantees given or security provided on behalf of beneficiaries

Credit facilities made available to beneficiary entities

Direct costs incurred by a company in assisting and hastening

development of beneficiary entities

Overhead costs of a company that can be directly attributable to

Enterprise Development contributions

Enterprise Development or developmental capital advanced to

beneficiary entities

Preferential credit terms granted by a company to beneficiary

entities

Preferential terms granted by a company in respect of its supply of

goods or services to beneficiary entities

Contributions made to settling service costs relating to the

operational or financial capacity or efficiency levels of beneficiary
entities

Payments made by the company to third parties to perform

enterprise development on the companys behalf

Empowerdex has performed an assessment of Shanduka Black Umbrellas,

based on the principles of Codes 400 of the Amended Codes BroadBased Black Economic Empowerment.

SECTION 2: ANALYSIS &

AND
FINDINGS
FINDINGS
ANALYSIS
Shanduka Black Umbrella An overview
In 2004 the Shanduka Foundation was founded with a R100 million
commitment spending over 10 years towards improvement of the quality
of education and promotion of SMMEs. In 2005 Black Umbrellas was
formed, a project spearheaded by two Cape Town social entrepreneurs to
support 100% black owned small micro medium enterprises (SMMEs). In
2009 the Shanduka Foundation partnered with Black Umbrellas to
escalate

the

project

countrywide,

culminating

in

Shanduka

Black

Umbrellas.

SBU is an enterprise development incubation non-profit organisation that

partners with private sector, government and civil society to address the
low levels of entrepreneurship and high failure rate of 100% black owned
emerging businesses in South Africa. The advancement of black
entrepreneurs and small businesses is at the heart of the SBUs
incubation programme which uses a multi-stakeholder collaboration
model with the common purpose of achieving economic and social
change through training, developing scaling, mentoring, creating supplier
and

financing

opportunities

for

capable

SMMEs.
7

FINDINGS

Nature of Shanduka Black Umbrella

When the Shanduka Foundation was launched in 2004, Shanduka Group
made a commitment to spend R100 million on corporate social
investments over ten years. Shanduka is well on track to achieve this
goal, having spent R87 million to date. In addition, when Shanduka was
founded, 5% of its shareholding was set aside for two trusts: Fundani, an
educational trust, and Mabindu, a small business development trust.
These trusts support the entities within the Shanduka Foundation
through which it carries out its social investments.
In March 2013, the Shanduka Foundation signed an agreement with
Kagiso Trust and the Free State Department of Education to work
together in 371 schools in two districts in the Free State. Shanduka
Foundation and Kagiso Trust have each committed R100 million over a
five year period to improve infrastructure and learner performance in
these schools. The Free State Education Department will match the R200
million.The emphasis is on South African black-owned micro enterprises.

Code 400, dealing with the measurement of the Enterprise Development

Element of Broad-Based Black Economic Empowerment seeks to measure
the extent to which enterprises carry out initiatives aimed at contributing
8

to Enterprise Development. The Enterprise Development Element also

aims to address certain key challenges facing Qualifying Small Enterprises
and Exempted Micro Enterprises and more specifically black-owned
entities that struggle to take their businesses from survivalist and/or
micro level to a level of sustainability and profitability.
Empowerdex,

and

based

on

verified

supporting

In the opinion of
information,

the

operations of Shanduka Black Umbrellas achieve this.

Legal incorporation of Shanduka Black Umbrella

Shanduka Black Umbrellas is an Association incorporated under Section
21 of the Companies Act (Registration Number 062-354 NPO), meaning
that it is a non-profit entity, with all surplus monies being retained for
furthering the objectives of Shanduka Black Umbrellas.

Analysis of Shanduka Black Umbrella beneficiaries

Empowerdex has verified that all beneficiaries of Shanduka Black
Umbrellas are classified as Exempted Micro Enterprises in terms of the
Codes. Furthermore, Empowerdex has verified that 100% of the support
given by Shanduka Black Umbrellas has gone directly to Enterprise
Development beneficiaries. Of this support, 100.00% black owned
entities.
Implications for Enterprise Development
Development recogniti
recognition of contributions to
Shanduka Black Umbrellas.
9

Empowerdex hereby concludes that Shanduka Black Umbrellas operations

are fully compliant with the requirements of the Codes and all relevant
criteria therein for the recognition of Enterprise Development and
Supplier development Contributions.
Shanduka Black Umbrellas is therefore able to be considered as a conduit
of third party facilitation of enterprise development and supplier
development.

Furthermore, Empowerdex has verified that Shanduka Black Umbrellas is

an association incorporated under Section 21and can therefore verify that
all profits accumulated are retained as reserves to fund the future
running costs of the organisation.

The documentation that has been reviewed to arrive at this verification

conclusion includes the following:

Statutory documentation of Shanduka Black Umbrellas

Ownership information of all beneficiary businesses in the form of

affidavits, as all beneficiary businesses is Sole Proprietors.

Affidavits from all beneficiary businesses confirming their turnover

is less than R10m per annum

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SECTION 3: CONCLUSION
Empowerdex has taken due care and caution in its verification of the
Enterprise Development compliance status of Shanduka Black Umbrellas
and its findings and conclusions thereon. Empowerdex is certain that the
outcome of the analysis is a true and accurate reflection of reality and
that the conclusions drawn are in line with the provisions set out in the
Codes.

Empowerdex has retained copies of the substantive evidence provided by

the company to support the conclusions made on its premises in line with
the requirements of SANAS and the Department of Trade and Industry.

Signed for and on behalf of Empowerdex (Pty) Ltd.

Duncan de Groot
Group Executive Ratings Network
Empowerdex (Pty) Ltd
Tel: 021 419 5130
Email: ddegroot@empowerdex.com
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